Luxembourg-headquartered impact investing manager Funds For Good has launched the FFG Global Flexible Sustainable fund at the end of 2017.
The fund is the SRI and social impact version of the BL Global Flexible fund, launched in June 2005 and managed by Guy Wagner, chief investment officer and managing director at Banque de Luxembourg Investments (BLI).
Some 45 positions are held in the FFG fund against around 75 in the original fund. The equity, bond, cash and gold exposures and the investment objective of our fund will be similar to these of the BL Global Flexible fund with two main differences though.
Speaking to InvestmentEurope, Nicolas Crochet, co-chief executive officer of Funds For Good, highlights these differences.
“First, the social responsible investing policy of the Funds For Good’s version of Global Flexible will be axed around three points. A negative screening will be applied to the fund. All companies excluded by Norges Bank for the Norwegian government pension fund will be put aside of the stock selection.
“We have also much emphasised around ESG. Regarding the environmental component, on the equity side (70% of the fund), we want our fund to issue minimum 20% less CO2 emissions than its benchmark (MSCI All Country World Index). At inception, the carbon footprint of our fund was 70% below that of the benchmark.”
As for the social part, Crochet says the fund will use the Labour Management Score to assess employees’ well-being in the stocks invested by the fund. The score will reach 7 over 10 in our fund against 5 over 10 for the benchmark, he adds.
All voting rights will be exercised and discussions will be engaged with companies invested for improvement on governance.
“Lastly, in order to be in line with our impact investing guidelines, FFG contributes roughly 45% of its revenues to its social project and foundation, whose assets are lent to unemployed individuals eligible to obtain a micro-credit across Europe but who do not provide sufficient guarantee to be granted one,” explains Crochet.
The other main difference with the initial fund is that the FFG Global Flexible Sustainable fund will also hold small caps and have a greater exposition to mid-caps, and a lesser one to mega-caps than in the original BL Global Flexible fund.
A number of other FFG funds are managed by BLI. Last September, Funds For Good also launched the SRI version of a global equity fund managed by Acadian Asset Management.